THE Singapore stock market's current weakness has uncovered value again in several plastic injection moulding companies that are poised to chalk up record earnings this year, according to GK Goh analysts.

In a 24-page report on the sector, they say the recent sell-down has provided an opportunity for investors to accumulate shares of such companies as First Engineering, Huan Hsin, Meiban Group and Sunningdale Precision Industries.

GK Goh notes that most of these firms are trading at single-digit price-earnings ratios on earnings growth of 27-30 per cent and return-on-equity projections of 16-27 per cent for 2004, and could be re-rated when they release their results.

'We believe the share prices of these stocks will receive a boost from strong interim results expected in mid-2004, which will reaffirm their positive earnings prospects,' says GK Goh, which expects the stocks to outperform the Straits Times Index and the electronics stock index again in 2004.

The solid performance, it says, will be underpinned by attractive valuations and growth prospects plus healthy balance sheets. The companies are also expected to benefit from continuing outsourcing and anticipated healthy shipments of PCs, hard disk drives, mobile handsets and digital consumer electronic products.

'All the four companies we like have sizeable manufacturing facilities in low-cost countries in Asia to take advantage of their customer shift here,' GK Goh says.

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The Business Times